Terry Slavin reports on how the Global Commission on Adaptation is seeking to propel finance for resilience up the agenda for policymakers and investors
Climate change mitigation was only one strand of London’s Climate Action week. One person who kept popping up at events across the capital was Emma Howard Boyd, chair of the Environment Agency and the UK’s representative on the Global Commission on Adaptation, which was set up by 17 heads of state last October to bring scale and speed to climate adaptation solutions.
In her speech at the launch event at City Hall, she laid out the scale of the challenge, noting that total global damages from climate-related events have risen by 11% per year over the last two decades, hitting more than $306bn in 2017.
The world has 'dropped the ball very badly' on raising finance for adaptation
She predicted that the financial and social cost of climate-linked disasters are likely to continue if collective action is not taken.
Citing World Bank estimates, Howard Boyd noted that as many as 100 million people could be pushed into poverty by 2030 if global temperatures continue to increase, with sub-Saharan Africa and South Asia particularly badly hit.
Cities are especially vulnerable, she added. By the end of the next decade, it is estimated that roughly two thirds of the world’s estimated population of 8.5 billion will be urban dwellers. To deal with the climate challenges arising from this growing urbanisation, the UK’s green deal commits the government to spending at least £5.8bn on international climate finance.
Between 2011 and 2015, the UK’s overseas climate finance expenditure came to £3.87bn, much of it directed to urban projects. Welcome as the government’s pledge is, she said, it constitutes a drop in the bucket when considered alongside the $6.3trn needed for global clean infrastructure investment every year.
Later in the week, Howard Boyd spoke at the Finance for Adaptation Solutions and Technologies Roundtable, hosted by law firm Willis Towers Watson. Andrew Steer, president of the World Resources Institute, opened the half-day conference by saying that the world has “dropped the ball very badly” on raising finance for adaptation, which has been the “poor sister of mitigation for much too long”.
He added that the Global Commission on Adaptation, which is co-chaired by Bill Gates and World Bank CEO Kristalina Georgieva, is meeting in Bangladesh this week to prepare a draft report that will be launched at the UN climate meeting in New York in September. The report will call for a year of action on adaptation, with six or seven action tracks. “We hope to see huge energy added to that space,” said Steer.
It is an existential problem which we, in the private sector context, are doing less than 6% about
Another member of the commission, Peter Damgaard Jensen, CEO of Dutch pension fund PKA, said it was important to get the private sector involved in financing adaptation. Although his company’s portfolios are 8-9% invested in green finance, none is in adaptation or resilience.
“We have to find ways to make sure every investment is resilient so we aren’t going to have to rebuild those windmills and bridges in 15-20 years,” he said.
Blended finance, with public-sector investment de-risking projects so that they attract larger sums from private investors, was even more suited to adaptation than mitigation projects, he suggested.
Jay Koh, co-founder and managing director The Lightsmith Group, a New York private equity fund that convenes the Global Adaptation and Resilience Working Group of investors, told the Economist conference on climate risk that climate change is a risk that is affecting corporate valuations today. He cited PGE in California, which filed for Chapter 11 bankruptcy protection early this year in the face of ruinous lawsuits over last year’s wildfires.
There is a big investment opportunity in the existing technologies and services that can scale and be oriented towards addressing the impacts of climate change, he said. “It is an existential problem which we, in the private sector context, are doing less than 6% about,” a reference to the fact that only 5-6% of climate change finance is going to adaptation.
The UK is not ready for the impacts of climate change, even at the minimum expected level of global warming
How far Britain has to go in preparing for a warming world was highlighted this week by the UK's Committee on Climate Change (CCC), which released its first evaluation of the government’s climate change adaptation plan. The committee said none of 33 key sectors assessed "show good progress when it comes to managing climate change risk."
Baroness Brown of Cambridge, chair of the CCC’s adaptation committee, said: “The UK is not ready for the impacts of climate change, even at the minimum expected level of global warming. The government is not yet addressing adequately all of the climate risks it has itself identified as critical – including from surface water flooding and the impacts of high temperatures on health."
In a statement, Howard Boyd welcomed the CCC report and said: "Global overheating is changing our weather and increasing our risk of flooding. That is why our draft Flood and Coastal Erosion Risk Management Strategy is seeking to better prepare us for a 2C warming in global temperatures as well as planning for higher scenarios such as a 4C rise in global temperatures.
"We welcome the Committee’s recognition that our draft strategy is taking the necessary and ambitious steps needed to be a climate resilient nation. We will be working with government and our partners to finalise the strategy later this year and will be taking the committee’s advice into account."
Additional reporting by Oliver BalchGlobal Commission on Adaptation Emma Howard-Boyd climate change UK green deal Peter Damgaard Jenson PKA Jay Koh WRI Andrew Steer